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Trans-Century GrAn Overview
INVESTING IN AFRICA
roup
Contents
1. Executive Summaryy2. Power3. Transport4. Specialised Engineering5. Consumer6. Summary Financials7. The Team 1
Executive SummaryTrans-Century Limited (“TCL”) is a Kenya–with investments across East, Central & So− Operating EBITDA of circa KES 1 4 Bil− Operating EBITDA of circa KES 1.4 Bil− Gross investment portfolio in excess oIndustry sectors include: Power InfrastruCableries Du Congo; Transport InfrastruSpecialised Engineering - AveryUniqueness of TCL:− Founded by entrepreneurial Kenyan bpeople and investorspeople and investors− Focus on power infrastructure, transpand specialized engineering− Operating companies led by dynamic with extensive experience & in-depth
–headquartered infrastructure group outhern Africallionllionof KES 9 billionucture - Tanelec, Kewberg, EA Cables,
ucture - Rift Valley Railways; and
business Entrepreneurial
port infrastructure Infrastructure focusmanagementcapabilities Ability to execute2
Investment considerations
Strong market fundamentals : undPower and Transport/ Cargo and SpStrong market positioning: In 7 coTanzania Rwanda DRC Zambia andTanzania, Rwanda, DRC, Zambia andL i l f ti ShLeveraging scale for execution: ShStrong management teams
Impressive financial performancethree) times money back on their
der-penetration and inefficiencies in pecialised Engineering ountries; including Kenya, Uganda, d South Africad South Africah h ld f d f KES 6 9 billihareholder funds of KES 6.9 billion
e: Shareholders have enjoyed 43 (forty investment since 20033
TCL’s focus going forward
Power TransportPower
Infrastructure
Transport
Infrastructure
Existing Investments:
Aluminium Cables Kenya-UganInvestments:
Copper Cables
Transformers
Switchgear
railway
Growth: Power Generation Logistics
Transmission
Trans-Century Ltd
AffiliatedSpecialised
e
Affiliated
Holdings
Specialised
Engineering
Consumer Investments
nda Distribution & Tea
Service
Operations &
Maintenance
Banking
Private equity
Engineering
Turn-key projects
EPC
Historical timeline & pan-A
2009: TCL becomes public 2006: engagement
of full timeof full-time management team
2004: TCL’s2004: TCL s initial buyout
POWER T
frican growth
TRANSPORT CONSUMERSPECIALISED
ENGINEERING
5
Contents
1. Executive Summaryy2. Power3. Transport4. Specialised Engineering5. Consumer6. Summary Financials7. The Team 6
POWER7
POWER7
Under-penetration of electrcommon theme across the rcommon theme across the r
InstalInstalled capacity( ) (MW/(MW)(Kenya) 1,473 (Kenya)(Uganda)
2
10.
919
340
(Tanzania)(Ghana)
2
1,490
919
( )(South Africa)
964,754
40,498
(USA)
Source: KPLC, US EIA
rification is a regionregion
led capacity per capita Electrification rate: / 1000 people)16%6
% of population38.2
14%
9%
4
5
21 6
7
61%
14%
3
4
62.4
21.6
100%
70%
1
2
3 172 9
831.8
100%13,172.9
8
TCL’s participation in the po
Power generationFocus area
Substation (step up)Focus areaFocus area
Residential/ Comm’l Use
ower sector
TransmissionTransmission lines Substations (step down)
Distribution transformers
Distribution lines
9
Regional utilities plans KenyaKenya
1.91.82.0
In millionsConnections
0.8
1.1
0 60.81.01.21.41.6 CAGR
19%
0.00.20.40.6
2006 2008 2012
Uganda
ConnectionsConnectionsUmeme Ltd, a regulated distribution company with a 20yr concessionCharged with growing connections , currently at 300,000 connections
Source: KPLC, Tanesco, Umeme, Ministry of Infrastructure
TanzaniaTanzania
1.61 61.8
In millions
CAGR
Connections
0.7
1.2
0.81.01.21.41.6 CAGR
13%
0.00.20.40.6
2007 2012 2014
Rwanda
2007 2012 2014
Connections
350
300.0350.0400.0
In thousands
CAGR25%
91 110
50 0100.0150.0200.0250.0
0.050.0
2006 2008 2012
(Rwanda) 10
Segmental reportingPower
In millions 2010A 20KES
Revenues 5,505 4KES
EBIT 368Strong growth in the business fundamentals, le–Copper volumes up 9%
l i i l 140%–Aluminium volumes up 140%–Transformer volumes up 38%Impairment of working capital at subsidiary le
009A % Variance
4,485 22.7%
731 -49.7%
eading to increased revenues:
evel impacted EBIT 11
Contents
1. Executive Summaryy2. Power3. Transport4. Specialised Engineering5. Consumer6. Summary Financials7. The Team 12
TRANSPORTTRANSPORT 1313
As port volumes rose, railwcontinued their consistent d
14
16
18
20MTs millions
continued their consistent d
78
4 86
8
10
12
14
4.8
2.5
0
2
4
6
1980s 1990s
Port Volume
Source: KPA, Kenya Railway Corporation and RVR estimates
way volumes decline
13
19
decline
13
2.0 1.5
2000 2010
RVR Volume
14
The RVR opportunityTechnAmerica La(TechnpartLogistica (leader in B
PeopleRailway engineers in the region are p
grenowned2 800 k f k
Existing assets2,800 km of track~100 locomotives~4,000 wagonsg
nicalatina ( )nical tner(ALL) is a Brazil
FundingStrong shareholdersBank lendersFunding
Bank lenders
ll fMarket
demand20 million MT of cargo15
Contents
1. Executive Summaryy2. Power3. Transport4. Specialised Engineering5. Consumer6. Summary Financials7. The Team 16
Network of opportunity
Strong regional presence with key relationships
POWER SOURCE PRODUCTS/PERKINS
17
Segmental reportingSpecialised Engineering
In millions 2010A 20KES
Revenues 411KES
EBIT 65Growth in the Specialised Engineering Division–Growing industrial baseFocus by authorities on stringent ob– Focus by authorities on stringent ob– Continued demand for back-up powe
009A % variance
226 82.0%
22 191.9%
n driven by:servance of codes and standards (weights)servance of codes and standards (weights)er
18
Contents
1. Executive Summaryy2. Power3. Transport4. Specialised Engineering5. Consumer6. Summary Financials7. The Team 19
ConsumerOverview
The prroductsProducts include:– loose tea (Nguvu, Supreme, Premium) – tea bags (Premium and Luxury)– infusion products (Camomile, Green tea, Hibiscus), )
20
Segmental reportingConsumer
In millions 2010A 2KES
Revenues 915KES
EBIT 114Tea volumes up 13% driven by:– Growing demand for tea in the re– Successful business repositionin
2009A % variance
714 28.1%
33 249.2%
egiong21
Contents
1. Executive Summaryy2. Power3. Transport4. Specialised Engineering5. Consumer6. Summary Financials7. The Team 22
2010 Group PerformanceGroup revenat Ksh 6 8at Ksh 6.8b fGroup earnings befo(EBIT) 2(EBIT) 2at Ksh 974Group net incat Ksh 468
nues 25%8 billion8 billionre interest & taxes 22%22%4 millioncome 99%8 million
23
Summary Financial StatemeIncome statement
Ksh in thousandsKsh in thousands
TurnoverP fit b f d i tiProfit before depreciation, impairment and finance costResults from operating activities
Profit before income taxProfit after income tax
Profit after tax is attributable to:Equity holders of the companyNon-controlling interestProfit for the year
ents
GROUP GROUP2010 20092010 2009
6,794,650 5,414,887
1,415,828 1,105,627974,271 796,069
630,585 526,625468,262 234,497
343,713 91,903124,549 142,594468,262 234,497
24
Summary Financial StatemeBalance sheet
COMPANYKsh in thousands 2010
KShs'000ASSETSNon current assets 9,040,291Current assets 392,374Total Assets 9,432,665
EQUITY AND LIABILITIESShare capital 133,519Sh i 106 684Share premium 106,684Reserves 6,692,676Equity attributable to equity holders 6,932,879Non-controlling interest - Total Equity 6,932,879Non current liabilities 2,166,657Current liabilities 333,129Total equity and liabilities 9 432 665Total equity and liabilities 9,432,665
ents
COMPANY GROUP GROUP2009 2010 2009
KShs'000 KShs'000 KShs'000
7,878,499 7,141,777 5,039,372556,398 4,094,701 3,693,9598,434,897 11,236,478 8,733,331
131,462 133,519 131,462106 684 106 684 106 684106,684 106,684 106,6845,581,918 3,711,277 2,397,9285,820,064 3,951,480 2,636,074- 1,341,974 881,7715,820,064 5,293,454 3,517,8451,952,622 3,371,518 3,168,545662,211 2,571,506 2,046,9418 434 897 11 236 478 8 733 3318,434,897 11,236,478 8,733,331
25
TCL’s Strong Track Record
TCL Group Revenues
8 000
6.87,000
8,000
5.5
6,000
CAGR25%
enue
s in
billi
ons
4,000
5,000
Grou
pre
v
NoIn
4,000
2009A 2010A
The group has seen remarkable growth in revcompany revenue as well as new acquisitionsTCL is investing in the future with circa USgcapacity across core cables and transformer bNote: ¹Times Money Back calculation assumes investment of TCL Hold Co’s 20
Value creation¹
50x10
6.935x
40x
45x
50x
7
8
9
10
43 x
ons
20x
25x
30x
4
5
6
olde
r fun
ds in
billi
o
0.10x
5x
10x
15x
0
1
2
3
Shar
eho
o. ofvestments: 0 1 5 6 8 9 10 10
0x0
2003 20101 x
venues, driven by organic growth in portfolioSD 20 mm of capex spent aimed at triplingp p p gbusinesses003 shareholder capital 26
Contents
1. Executive Summaryy2. Power3. Transport4. Specialised Engineering5. Consumer6. Summary Financials7. The Team 27
B d f diCompany Board of DirectorBoard of diP t K Z h i h MPeter Kanyago Zephaniah M
3eex
Founder East Africa CourierCPA (K), MBA, industrial management
Njeru Kirira Robin K– Directorship: EAbcon Group, Z
c– Directorship: Ecobank (chair) Fedex, Otis, KTDANjeru Kirira Robin K
Tax and fiscal policy administratorServed various capacities in G t T
BC(A– Directorship: Inoorero University – Directorship: P
(K), Sigona Gol
Govt. Treasury A
Carol MusyokaExtensive experience in banking & corporate fi– Directorship: Enablis (EA),
Institute for Economic Affairs
finance
(8)rsrectors (8)N i KiMb Ch i Ngugi KiunaMbugua, Chair
30 years of entrepreneurship experience (industrial h i l )
Vast senior multinational management
Kimotho Joseph KaragoEAC (chair), P&A (EA), Zeniki Investments
– Directorship: UBA bank (Chair), Cooper Ke, Cannon Assn, X&R Tech
chemicals) experience
Kimotho Joseph KaragoBusiness advisory & Consultancy regionally (Eastern & Southern Af i )
Large-scale architectural developmentUrban infrastructure d l t
Polaris International lf Club
– Directorship: Kenya Children’s Home, Karago & Associates, Mcensal Ltd
Africa) development
Dr. Gachao KiunaCorporate finance & strategy consulting gy g(McKinsey)
28
Experienced Management tDr. Gachao Chi f E i OChief Executive OYida KemoliGroup Head of Corporate finance & Strategy Corpstrat(McKPhD
Capital markets investment banking (JPMorgan), Africa PE experience (Actis)MEng in Chemical
PhD Bioc
Allan MunyuaMEng in Chemical Engineering
Division Principal, Power & Mumo MuthDivision ManagerBusiness procurement, Financial management advisoryMasters in settlement &
Specialised EngineeringInves(DeutprivaMBA
Consumer and In
Ng’ang’a NjiinuMasters in settlement & infrastructure development, Bachelors of Architecture Kibiru Mut
MBA Schoo
Financial analysis, planning & strategyChartered Financial Analyst
Division Manager,Specialised EngineeringBachin FinUnive
Business AnalystChartered Financial Analyst, MBA finance & investment management
Univelevel CFA d
teamKiunaOffi Wambua Kimeu Group Head of FinanceOfficerporate finance & tegy consulting Kinsey)Biotechnology BScBiotechnology, BSc
chemistry Audit & Advisory (PwC)Certified Public Accountant (Kenya)Bcom finance
Geoffrey NjueGroup Internal Auditorhengir, Group audit experience at Nestle and Industrial Promotion ServicesCPA (Kenya)
stment banking tsche Bank) and
ate equity experience(Harvard Business
nvestor RelationsCPA (Kenya)BSc in Civil EngineeringJanet Wanjikuthaka
(Harvard Business ol), BBA finance
Audit (Kenya Women Finance Trust)Certified Public Accountant
Management & Financial Accountantelor of Science degree
nance from Towson ersity Maryland USA Certified Public Accountant
(Kenya)Bcom finance 29
ersity, Maryland USA. 3 candidate for the
designation
Contact Us
www.transceentury.co.key
30